Venice HMA, LLC v. Sarasota County
198 So. 3d 23
Fla. Dist. Ct. App.2015Background
- The Sarasota County Public Hospital District was created by special act in 1949 and given taxing authority; in 1959 the legislature added an indigent-care provision requiring Sarasota County to reimburse district hospitals and "any other hospital in Sarasota County" for care to medically indigent patients. The 1959 provision was carried forward (with minor edits) into a 2003 comprehensive special act codifying district authority.
- Venice HMA, Sarasota Doctors Hospital, and Englewood Community Hospital (the Private Hospitals) are for-profit hospitals that began submitting monthly claims (totaling about $200 million by the summary-judgment hearing) to Sarasota County under the 2003 act's reimbursement clause; the County refused to pay.
- The Private Hospitals sued for declaratory and injunctive relief seeking reimbursement; the County counterclaimed that the mandatory reimbursement to private hospitals in Sarasota County violated the Florida Constitution's prohibition on special laws granting privileges to private corporations (art. III, § 11(a)(12)).
- The trial court granted summary judgment to the County, severing the paragraph of the 2003 special act that mandated reimbursement to private hospitals; the Private Hospitals appealed and the district court consolidated the appeals.
- The district court reviewed constitutionality de novo and held that the mandatory reimbursement provision conferred an unconstitutional "privilege" on private corporations because it would use local taxpayer funds to confer a benefit not available to similarly situated private hospitals elsewhere in Florida.
- The court also held the offensive portion severable from the remainder of the 2003 special act and affirmed the trial court's judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2003 special act's indigent-care provision that mandates county reimbursement to "any other hospital in Sarasota County" grants an unconstitutional privilege to private corporations | Private Hospitals: provision is valid because it merely places them on equal footing with public district hospitals and permits reimbursement for providing indigent care | County: provision improperly forces local taxpayers to subsidize private hospitals, giving them a unique advantage over other private hospitals statewide in violation of art. III, § 11(a)(12) | Held for County: mandatory reimbursement to private hospitals is an unconstitutional privilege under art. III, § 11(a)(12) |
| Whether statutory duties to provide emergency care (state EMTALA/federal law) negate the claimed privilege | Private Hospitals: they provide a public service (indigent care) and thus reimbursement is appropriate | County: statutory/emergency obligations do not eliminate the fact that direct taxpayer-funded reimbursement would uniquely benefit these private corporations | Held for County: compulsory taxpayer reimbursement still confers a forbidden private corporate privilege despite emergency-care obligations |
| Whether analogous case law upholding public financing of health projects supports the Private Hospitals | Private Hospitals: cite cases validating public financing or support for private health facilities as serving a public purpose | County: those cases concern public financing of capital projects under different constitutional provisions and are inapposite to the special-law privilege prohibition | Held for County: precedents about public financing (article VII) do not control the article III special-law privilege analysis |
| Whether the unconstitutional reimbursement provision is severable from the remainder of the 2003 special act | Private Hospitals: implicitly argue provision should survive or act invalidated as whole | County: requested severance of the offending paragraph so the remainder of the district's special act remains effective | Held: Severable — the offensive paragraph can be removed and the act's remaining provisions remain effective; legislature contemplated severance language |
Key Cases Cited
- Shands Teaching Hosp. & Clinics, Inc. v. Mercury Ins. Co., 97 So. 3d 204 (Fla. 2012) (standard: de novo review of statutory constitutionality and constitutional interpretation)
- Lawnwood Med. Ctr., Inc. v. Seeger, 990 So. 2d 503 (Fla. 2008) (definition and scope of "privilege" under Florida Constitution)
- Linscott v. Orange Cnty. Indus. Dev. Auth., 443 So. 2d 97 (Fla. 1983) (upholding public financing for private projects where public purpose present — cited by Private Hospitals but distinguished)
- Wald v. Sarasota Cty. Health Facilities Auth., 360 So. 2d 763 (Fla. 1978) (public-purpose discussion supporting validation of revenue bonds for hospital projects — distinguished)
- Cramp v. Bd. of Pub. Instruction, 137 So. 2d 828 (Fla. 1962) (severability factors applied)